Anticipate Disruption with the Kinetic Enterprise

The Kinetic Enterprise is Built to Evolve. As companies emerge from the impacts of one of the most disruptive events in the last 100 years, it’s now time to re-examine operating models and build organizations that can endure in times of similar devastation and future disruptions. As organizations continue to reel from the effects of what is now the new normal — continuing supplier instability, evolving customer demands, and challenging needs of organizational talent — the question is, how can they better prepare and respond effectively?

As companies emerge from the impacts of one of the most disruptive events in the last 100 years, it’s now time to re-examine operating models and build organizations that can endure in times of similar devastation and future disruptions. As organizations continue to reel from the effects of what is now the new normal — continuing supplier instability, evolving customer demands, and challenging needs of organizational talent — the question is, how can they better prepare and respond effectively?

The answer lies with an approach to disruption that anticipates rather than reacts to volatility. Organizations that are “built to evolve” will last. Deloitte terms these organizations the Kinetic Enterprise — with SAP S/4HANA at the core.

Proactive Adaptiveness

For many organizations, the disruptions occurring over the last two years required an immediate strategy and response. Many companies exhibited great resolve in quickly pivoting to online and digital, while at the same time they were forced to take on some of the most complex talent challenges of our generation. It’s now an expectation for companies to adopt online practices
and offerings; they are table stakes, making the digital infrastructure behind them extremely critical. Deloitte takes clients through their Kinetic Enterprise framework to not only target business objectives and measure outcomes, but to consider the infrastructure and technology that will propel them forward and establish a future state that is agile and adaptable to changing
market demands.

In addition to external market pressures, organizations are now challenged, more than ever, by employees who expect them to be socially responsible, to offer meaning and purpose in the work they do, and to offer flexibility in how they work. While business models adapt for customers, we are simultaneously adjusting organizational models to adapt to our employees’ expectations of flexibility and sense of purpose. It is difficult. It is a huge challenge, which is why the Kinetic Enterprise is informed by our extensive research on the Future of Work. Both are critical for meeting the talent expectations of today.

The Kinetic Enterprise is Built to Evolve

Persistent, complex disruption — whether it is coming from suppliers, customers, or employees — proves to us that the built-to-last enterprise is no longer a feasible paradigm. This paradigm has been magnified throughout this current pandemic. For example, a factory that can retool quickly and minimally eliminates months or years for substituting equipment or upskilling employees. Instead, it can now take weeks, allowing the rapid manufacture of a new product. Another example is an overnight pivot from a brick-and mortar storefront to a fully operational digital commerce site. These, and many transformations like them, have quickly taken place all around us over the past couple of years, for small to large enterprises alike.

This is truly what we mean by enabling built-to-evolve enterprises. They are adaptable and have the systems, processes, and culture in place to swiftly pivot and execute the next product or service offering.

Four Pillars of the Kinetic Enterprise

What is required to enable the Kinetic Enterprise? It is not about being a gatekeeper, but rather being aligned to business processes and focusing on outcomes for the organization with processes that are both scalable and evolvable.

Deloitte uses the following four pillars to guide clients on the journey to becoming a Kinetic Enterprise.

CLEAN. Clean means implementing SAP S/4HANA with minimal custom code to reduce overall technical debt.
■ Set up a governance and decision-making structure such that when you establish the core and do the upgrade to SAP S/4HANA, it is done cleanly and with the least possible customization.
■ Extend the digital core with innovation on the edge using SAP Business Technology Platform (SAP BTP) to enable the organization for adaptability and embed intelligence into standard processes.
INTELLIGENCE. Intelligent technologies can be leveraged to build your differentiation on the edge of SAP, further promoting your clean digital core. Also, the use of intelligent technologies can help to automate processes, improve data consistency, reduce effort, and derive insights.

We believe in a core-to-edge strategy, focusing your differentiation and extensions on the edge. This does not happen without data aggregation, management, analytics, and artificial intelligence dashboards — all those IT complexities.

RESPONSIVE. The third pillar is cloud enabled, with capabilities for scaling in any direction and on demand. To pivot in any direction at the first sign of potential disruption requires agility and responsiveness. Responsiveness cannot happen without cloud. It is the source of speed and scalability. It really serves as an enabler of rapid innovation and supportive growth.

INCLUSIVE. Finally, the fourth pillar is focused on leveraging the ecosystem of services, solutions, and capabilities around SAP in an integrated and flexible way. Inclusive really means integration. How well can our IT environment connect to consume and leverage other apps, data solutions, and services that are out there? Often, organizations will have data in multiple systems or already have a technology footprint with multiple best-of-breed solutions. An inclusive approach allows organizations to bring an SAP S/4HANA implementation live, while still considering previous investments or decisions that clients have made in their processes.

With SAP S/4HANA serving as the core that harnesses and learns from the insights, organizations can now provide customers with the information they need, as well as inform strategic decision-makers and frontline workers. New revenue opportunities and operational efficiencies can all be gleaned from the data.

Final Thoughts

With RISE with SAP, SAP has made progress at simplifying how organizations consume their SAP S/4HANA technology stack, but organizations still must consider their business case and the business value they will derive from implementing new SAP solutions. That is where The Kinetic Enterprise comes in. Organizations can use the Kinetic Enterprise framework as a guide to implementing RISE with SAP. The considerations taken into account will help you not only define future processes, but also take full advantage of the technologies provided in the RISE with SAP offering.

What Does This Mean for SAPinsiders?

1. Invest more time in the planning phase. Take the time to understand how to successfully move to a clean core and responsive SAP S/4HANA system. Until your organization is ready for that change, it will be very difficult to achieve. Thus, you must spend time focusing on organizational change management, business processes, and data management. Back in the days of SAP R/3 Enterprise, it was the most flexible and strong tool because of the customization available to clients. Now, it is time to standardize and minimize that customization to attain a clean, responsive core. But that means significant change that starts in the planning phase, not when going through testing.

2. Build a governance structure with the ability to continually evolve. This is the power of SAP S/4HANA with companies accompanying it with SAP Business Technology Platform. This sets up organizations for intelligent, connected, and inclusive ecosystems that enable them to harness and gain from myriad apps and solutions out there. This can’t be achieved, however, without establishing a governance structure. So, set up a governance structure that remains focused on continual innovation and evolution within your business.

3. Utilize SAP solutions for innovation. The Kinetic Enterprise is not a one and done model. Think of it as a circle, and you can begin at any point or adjust at any point. With RISE with SAP, software is now available in a single stack, allowing you to start your SAP S/4HANA journey based on where you can get the quickest time to value and at the same time build a culture of continuous innovation. SAPinsider.org